with the ECMT Round Table - lead to fruitful discussions (12) and, if generally accepted, encourage further practical implementation.
This digression is mainly aimed at demonstrating that, in studying the contribution of transport and its sub-systems to the well-being of society, an integral approach is required. Such an approach also makes it possible for all effects of the traffic and transport system to be equally and conveniently included in the considerations, even if they are (as yet) unquantifiable. [See also Diekmann (17), van der Kolk (18).]
As regards the effects of the traffic and transport system - without being limitative - we should first of all consider the effect of the traffic or transport activity itself. This can be positive or negative. The negative effects relate to the influence on the facets mentioned earlier: environment, physical planning, safety, etc. Positive effects are then the creation of income, production value and employment. Yet this transport activity is not conducted in isolation but is only possible thanks to the available infrastructural network. Consequently, there is a causal link between the existence of the infrastructure and the transport activity;
a negative one through, say, wear-and-tear; and a positive one through, for example, taxes or levies. But the existence of the transport system itself in turn creates effects elsewhere in society, such as a higher degree of distribution, improvement in living conditions, emergency services, to mention just a few examples alongside the derived consequences in other sectors in terms of income, production, employment or improved quality. Provided that a causal link exists, the effect may be attributed to the transport activity.
It should also be remembered that the value of a transport system is more than just the sum of the various transport techniques. The synergetic effect of the transport system alone enables logistic processes, vertical-chain thinking, combined transport possibilities and, even more abstractly, "the free choice of transport mode by the shipper". This synergy of the system is therefore the reason why there is much discussion in this report of the transport system as such.
A system which fully integrates both the favourable effects (= benefits) and the unfavourable effects (= costs) of transport at all levels, in all sectors and in all its facets, can form the starting point for an attempt to quantify the effects using a standardised norm. The next stage can then be to draw up a balance sheet which, whether positive or negative, will indicate the direction for an effective policy either in general terms or focused on specific areas. For it is in fact not only a question of minimising the social costs but, in the end, of maximising the
net social benefit.
If the system of differentiating between internal and external effects is adopted, then it is found that there is a great lack of knowledge (19), particularly about the external benefits. In fact, the existence of these benefits is even denied.
If the internal benefit (or cost) is considered to be that consequence of the transport activity which exclusively brings benefits (or costs) for the parties operating in the market (with its regulatory effect towards an optimal allocation of production factors), then the external benefits (or costs) are the consequences for the other parties (private individuals, institutions or businesses) within society.
But, as was recently stated in a study by Planco Consulting (20), the existence of external benefits is attributable to the "Umdeutung der in der okonomischen Literatur gebrduchliche Begriffe" "externe Effekte" oder "soziale Zusatzkosten und Zusatznutzen", followed by the denial that, say, effects on productivity and supply or potentially possible uses could be the source of external benefits (21).
Similarly, during a Dutch Colloquium in 1991, a paper (22) was presented with the conclusion that "road traffic and transport are in practice linked only in very specific cases with external benefits (and slight ones at that) ..." "The existence of such effects is in fact largely in conflict with the principle of benefit maximisation for individual goods." These statements are based on an individualisation of the transport activity. However, if an integral approach is taken to the question, attention will have to be paid specifically to the transport system with all its related and non-related components. Generally speaking, for example, the individual provision of a transport service simply cannot take place without the collective "infrastructure" asset in addition to the individual means of transport. Besides, the interaction described in the introduction between other economic sectors and facets of social well-being calls for a minimum of disaggregation. Furthermore, in the event of a dispute about the classification of a certain benefit as internal or external - the causality of the transport system is at that moment no longer disputed - this benefit component always forms part of the aggregate total of social benefits. In brief, the differentiation between internal and external benefits ~ though perhaps useful for implementing separate calculation methods - is and remains merely a tool to arrive at that aggregate total of benefit components which we can refer to as the social benefits.
In the introduction, mention has already been made of a possible approach to the benefits question via the "chain relationships". Because of the interlinkages and mutual dependencies, the effects of a cause (in this case transport) may occur in unexpected places. If the consequence, which may or may not have been paid for, immediately affects the market participant on the demand side, then it can be classified as "direct". If the relevant effects are derived (or "induced"), then they can be described as "indirect", i.e. they do not influence one market participant but have an impact on others in society who, by definition, have not paid for them. However, would not such a split into "direct" and "indirect" lead in turn
to the same problems linked to individualisation as did the previous differentiation into internal and external? It seems very likely that it would, which is why another approach will also be examined.
Bearing in mind the essence of "chain relationships", i.e. the mutual links and interdependencies, the scenario that emerges is one of "loss risks". Taken to extremes, this then means imagining a society without transport, at least in the form that we know today (23). Wolters states that "particularly where there is a high degree of interrelationship with other activities and where there are no or hardly any conceivable alternatives, there is reason to assume that the integral importance of a sector of industry (or a part of it) is high for the entire economy". With regard to transport, he then translates this into the statement that
"its disappearance would bring all economic life to a standstill". The complex structure of European society, plus the objective of achieving the standard of well-being and not merely the standard of welfare, prevent this issue from being dealt with further in this report, even if that were at all possible.
Incidentally, the previously quoted Planco study (24) cannot see this scenario providing an answer. But perhaps ~ if a study is made into this - it might shortly be possible to ascertain empirically what impact the absence of an effective transport system has had in, say, present-day Cuba and (compared with its present situation) in the ex-GDR. The relatively limited size of these societies and their isolation from the outside world will certainly reduce the degree of complexity compared to (West) European societies.
However, one variant of this scenario, viz. the relative application of the
"loss risk", does offer prospects (25). On the basis of the "Oyevaar method" this was once applied in the Dutch seagoing shipping sector via the hypothesis whereby the required transport was taken over in full by foreign shipowners.
More than 70 per cent of the production value of 1985 was lost as a result.
The hypothetical replacement of one transport sector by another - obviously as far as is technically conceivable (such as long-haul road transport by, say, railways or inland shipping) and if the other conditions and objectives remain unchanged - leads to cost differences in money terms (e.g. extra investments and personnel costs) which in the event of a positive result can be allocated to the replacement transport technique as an already existing benefit component. It is then a question of cost-savings calculations.
A minimum value of the social benefits of a specific - here, a replacement ~ transport technique is, provided it is positive, the net balance in money terms of the known social costs and the known income, including the
above-mentioned hypothetical cost saving. The aggregate of these balances then yields - again as a minimum - the total of the benefits of the transport system, at least in so far as it concerns the various transport techniques. However, if the balance expressed in money terms is negative, then this should no longer be included in the appraisal. If it were, duplication might occur because the same amount would be booked again as a benefit component in the transport technique which has been replaced in this case.
Another method of calculation might involve an identical comparison of all transport techniques with an (as yet) hypothetical mode of transport, suitable for carrying all goods, with many fixed internal costs and few "indirect external"
costs.
Through the use of such a "constant" the mutual relationship of all existing transport techniques can then be derived, the size of the "hypothetical cost-saving"
benefit component can be determined and perhaps ultimately, through the use of key ratios, the social net benefit.
The above-mentioned (as yet) hypothetical transport mode is a (vacuum) high-speed tunnel transport system, also known as "underground flying" (26).
"Underground flying" is the idea of using pipelines with guide rails ultimately with a vacuum because of the then negligible resistance and highly economical use of energy - to transport goods (and passengers) in capsules at high speeds (on average, 540 km per hour). Modern drilling techniques ~ which still have to be perfected - enable construction at a depth of thirty metres of a coarse-meshed, widely branched network within Europe. The project, which is officially under way in the Netherlands under the name "High Speed Tunnel Transport" (HSTT), has been subjected to an economic feasibility study (Dutch acronym: Mecenas) (27) for the lines Rotterdam-Munich (1) and Amsterdam-Paris (2) with a number of intermediate stations, technically located on parallel branch lines at intervals of at least 150 km. A strong market position seems to
exist above all for distances in excess of 250/300 km. Even at a commercial
interest rate of 7.5 per cent, which is unusual in social cost-benefit analyses, there are prospects of an operating profit which, since a large proportion (75-80 per cent) of the costs are fixed, may also increase annually (cf. Table 1).
On the assumption that feeder transport at both ends will be above ground and in view of the slight substitution of the classic transport sector by HSTT for cargo and passengers over the country as a whole, the report itself assumes a very modest environmental impact, but for the purposes of our "hypothetical"
replacement, we have assumed complete substitution so as to keep the
methodology simple. Later on, however, a substitution coefficient will also have to be introduced in the calculation in this respect.
In view of the many other calculation difficulties (e.g. estimating the change in productivity in the transport mode if the quantity of cargo to be transported is increased), the "loss risk approaches" will in any event remain balanced and integrated on the basis of already known data which are certainly comparable with each other. One example of the environmental cost components already known in the mutual relationship is given in the following table, which on the one hand, has been slightly abridged (solely version 1) and on the other has been slightly expanded, viz. to include "underground flying without feeder transport at both ends" and which is also taken from a recent Planco study (29) commissioned by Deutsche Bundesbahn (cf. Table 2).
Another clear example of the possibilities, certainly on the cost components side, is a "benefits overview" (30), much propagated by the inland navigation
sector.
To transport a cargo of 1 775 tonnes which fits inside 1 inland waterway vessel of 95 metres length, the following equivalents would
be needed:
By rail: 60 wagons, train length 600 metres;
By road: 90 lorries, a convoy of 1 000 metres in length.
Distances covered with 5 litres of fuel per tonne:
Inland waterway vessel: 500 km
Rail: 333 km
Road haulage: 100 km
Air freight: 6.6 km
Tractive motor capacity per kg:
Road: 150 kg
Rail: 500 kg
Inland waterway vessel: 4 000 kg
The validity of these "promotional" figures may perhaps be open to much argument (31), but both tables show that all sorts of comparisons ~ which are certainly uniform in their mutual relativity - can be made.
The next chapter discusses the question of whether it is important to highlight so explicitly the specific characteristics of the various transport sectors.
The chapter also contains some macro-economic data on transport techniques applicable for the Netherlands.
A number of current added- value studies, mainly in the seaports sector, are also dealt with in Chapter 3 to find out whether they include further systems or statistical methods which might prove useful.
PLACE AND QUALITY OF (AND MACRO-ECONOMIC DATA ON) TRANSPORT MODES
The title of this chapter indicates the object of the exercise: descriptions of transport modes and the effects of the transport transaction - i.e. the effects
"visible" to the parties and valued in money terms. Wherever possible, a split by transport mode will be made. The distinctive characteristics of the various transport techniques have meant that for different types of transport certain techniques sometimes even hold a dominant position as regards the preference of shippers. Recently, the overview of the sub-systems in goods transport drawn up by De Wit/van Gent (32) was supplemented by Drs P.J.M. de Groot (33) in his July 1991 publication on the transport of goods by pipeline (cf. Table 3).
In this table, which is clear in itself, the underlined transport mode represents the "dominant" transport technique - in terms of tonnage transported ~ in the relevant sector. In the sectors which are characterised on the one hand by the nature of the goods to be transported and on the other hand by the distance, transport by pipeline is still included in the lower-value goods sectors. This, however, is a reflection of the existing situation. The question is whether this will remain so over the longer term. In the Netherlands, for instance, there had already been forecasts as long ago as in 1972 (34) and also in 1982 (35) but to a more intensified extent in recent months (36) about the transport of goods via pipeline capsules in the sense we described above, albeit in the distance future.
The previously mentioned feasibility study into HSTT (underground flying) also dealt with the characteristics for goods transport, obviously including HSTT itself, in the form of the self-explanatory Table 4 (37).
From the Dutch statistics not only the number of persons employed in the sectors of relevance can be derived, but also a great wealth of other data expressed in money terms (cf. Table 5).
Incidentally, these figures show that the road haulage and airfreight businesses, the transport modes which have a negative image from an environmental point of view, certainly make the biggest contribution to these economic criteria, at least as far as the Netherlands is concerned.
The two tables 4 and 5 mainly deal with the demand side of the transport market and were in fact compiled in that particular context. But quality diagrams have also been drawn up with a view to the supply side of this market. Kuiler came up with Table 6 (38).
The author also saw a copy, whose only source reference was NVI (39), containing the quality groupings in the various sub-systems (see Table 7).
In the first table showing the sub-systems in goods transport we have already seen the dominant position of road transport. Apparently, this technique has a number of characteristics which fulfil wishes. By definition, goods do not have wishes (though they do have requirements), but, by contrast, man as an organiser has all the more wishes; in practice this is usually the shipper, recipient, forwarder or logistics operator. A great deal has been published about their preferences (40).
All possible factors of relevance have been mentioned and evaluated in these publications. In addition, the constraints on making changes in the modal split have been dealt with in depth: besides bringing strongly increasing search costs, this would also only be possible for a limited market segment, since a large part of the transport market is "captive", i.e. is by necessity performed by one transport mode. In my view, however, this is due to change quickly because of the emergence of goods in different forms, e.g. in containers. In this way the goods are presented in an increasingly standardized form on the market in units
"made-to-measure" for all transport techniques. As a result of containerisation, for instance, general cargo has now returned to the inland waterway vessel, despite the fact that this is essentially a bulk mode of transport. This emphasises the fact that a modal split evaluation will have to take place at the level of the individual shipments. For the purposes of our subject, therefore, it makes no sense to compare the various transport modes with each other as to their characteristics and then to attribute values to these which would ultimately have to lead to a comparative benefits calculation. We would then have become bogged down in "stated preference" research, whilst the real benefits research
ought to be "revealed", i.e. based on actual practice. In the case of the scenarios with hypotheses mentioned in Chapter 1, "revealed research" also remains possible provided that the hypothesis is based on conditions and circumstances which have been observed in practice.
Back to the statistical material; might the "Added Value" - an aggregate of balance values - perhaps help us further on our way? There have been a number of recent studies on this which though largely dealing with seaports and airports - do make attempts to express this value in money terms in great detail. Perhaps this will help us further with our methodology.
3. ADDED VALUE STUDIES
In this Chapter a description is given of three studies which attempt to ascertain the added value of certain transport activities - notably seaport activities. These are: (a) a Dunkirk study dating from 1989; (b) a study in Rotterdam which is still under way; and (c) a study into the Flemish seaports which, though completed, has not yet been released. This latter study also commented on inland waterways shipping and road transport and is therefore of direct importance for the subject we are dealing with.
a) In 1989 the port authority of Dunkirk, France, commissioned a study (which, incidentally, has not been published) into the added values which the seaport and its related activities generate for the community.
For this purpose, Prof. Gamblin developed a method which can be
summarised as follows:
An indissoluble symbiosis exists between the seaport, the relevant city, region and hinterland. Three effects of the relevant port activities can be distinguished: direct, indirect and induced effects. The first relate to the effects of the services (including fishing activities) supplied to the ship or to the goods transported by the ship. Also included in this category are the parties which act as intermediaries between ship and cargo, e.g. for insurance, inspection and valuation, but also the port authority, and even a section of the Chamber of Commerce, customs and excise, employers' associations and trade unions, plus trade brokering such as Bourse activities, commodity futures markets and ship chandlers. The second - indirect - effects comprise the industrial activities related to the port and all transport activities linked to the
above-mentioned activities; for the Dunkirk seaport Gamblin did not apply what he terms the "Antwerp definition" (41), viz. that only the industry which is actually established in the port should be studied. It is not so much the location as the link with seagoing shipping that is important. In this way he arrives at five types of industry, regardless of where they are located (ship repairs, fishing, supply businesses, maintenance and industral activities which are dependent on large quantities of water, e.g. a power station). He also touches on - but does not include in his study - the activities which are attracted by the
"seaport mentality", by the higher standard of its transport infrastructure, skills training, maintenance and commercial equipment. The transport activities relate to the feeder transport for incoming and outgoing cargo as well as to the transport generated by the industrial activity. The third category of effects - the "induced" effects - are interpreted by him to mean those services and commercial activities which are supplied to individual households and to the foregoing activities, as well as parts of the public administration services and a part of the tax revenue.
Territorially there is hardly any restriction either. Where he feels it is appropriate, he looks not only within the municipality of Dunkirk, but also in the Dunkirk urban district, in the Nord-Pas-de-Calais region, indeed even in the rest of France, and occasionally even in the rest of
the world.
To calculate the gross added value he uses different formulas, depending on the category or sub-sector. In the case of companies this is based on production less intermediate consumption, excluding depreciation. In the case of institutions (etablissements) it is only possible to give a pro rata percentage, preferably based on the total payroll cost than on the number of employees. In the "sector public", i.e. the production of public-sector services, the gross added value comprises the total payroll plus the value of the buildings and the expenses required for operating purposes. In the case of the professions it comprises the fees and the turnover, less bought-in goods and services. For the present report it is further of importance to note that the gross added value attributable to this region from inland transport modes could only be determined in a fragmentary form and therefore did not produce much result.
b) Rotterdam has also carried out its fair share of added value calculations, or at least studies into them. Since 1989 work has been under way on a method for measuring the annual added value development of seaport activities in macro-economic terms. An initial phase has been
completed and relates to the calculation of the direct added value per seaport activity per year (42).
Here we shall by-pass the additional complication that the statistical material at regional level had to be compiled separately. Since this meant that assumptions had to be used, no fixed and absolute level can be attained, though it is possible for the aim of the comparison to be derived from the annual development. An input-output table for the Rotterdam region (Rijnmond) was successfully developed. Instead of the volume of production or the number of businesses or employees, the added value criterion was chosen so that the spin-off in the subsequent phases could also be ascertained, i.e. not only the direct but also the indirect effects of the port activities. In fact, with the aid of the above-mentioned input-output table and the direct added value which is already known, it must be possible to calculate the indirect added value.
This is done using multipliers (43) which relate to both the upstream and downstream (44) impact of sectors of industry on the other links in the business column, both inside and outside the Rijnmond region. The fact that this must definitely be considered feasible can be deduced from the findings of a similar calculation that was made for a Physical Development Plan involving an updated airport to the North of Rotterdam, known as the "Integral Plan Northern Margin" (Dutch abbreviation: IPNR) (45) (see Table 8).
The "trickle-down effect" consumer spending of income earned in the port - can also be calculated with the aid of "spin-off coefficients"
(multipliers).
Of the further proposals for studies, it is also worth mentioning in relation to our subject that, besides the calculation of some key ratios - like value added per employee, per hectare or per tonne of cargo, which can already be calculated as these parameters are known -reference is also made to a future calculation of the added value per unit of "peripheral condition", such as investment or the environment.
Lastly, two tables taken from the report (46) are set out below in a highly abridged form to give an idea of the results of this first phase (see Tables 9 and 10).
c) Belgium has really reached a highly advanced stage in developing an operational analysis method for evaluating the macro-economic